Every week Merrill Lynch publishes a Capital Market Outlook Letter. The letters provide market commentary, research and analysis, and the occasional investment idea. Merrill Lynch (together with parent Bank of America) is the third largest brokerage firm, managing over $3 Trillion in client assets1. When a firm of that size speaks up, you should listen.
Starting around March of this year, they disclosed an investment thesis called FAANG 2.0. It’s a fascinating idea and gold plays a prominent role.
Let’s unpack it.
Transitioning from FAANG 1.0 to FAANG 2.0
The original FAANG acronym described the high-growth, tech-centric companies that accounted for an outsized portion of returns over the last decade, and then catapulted even higher once the pandemic hit. FAANG

This week’s episode of the Gold Exchange Podcast explores the idea of profits, and why it matters how you get them. Much of the financial world has confused the idea of profit with price appreciation. Or as we like to say, they confuse investment with speculation. Investment is deploying capital productively in a business for a yield. Speculation is betting one’s capital on an asset price rising.
There’s a reason why this confusion exists. Central Banks have manipulated and distorted the most important market on planet earth – the market for money and credit. Interest rates are unhinged, and have been falling for over four decades. This has created an investment environment where more and more activity is speculative, and less and less is real investment. While

[unable to retrieve full-text content]This month marks the five-year anniversary of Monetary Metals paying interest on gold. It was July 2016 when we offered our first Gold Fixed Income True Gold Lease. The gold lease was to Valaurum for manufacturing their flagship product, the Aurum®. It paid 3.0% interest on gold to investors (you can read the original press release here).

Can there be innovation in physical gold? Absolutely! In our increasingly digital reality, innovation in the material world may seem a bit passé, but not to Dr. Adam Trexler, founder and President of Valaurum. Valaurum produces the Aurum® – the smallest verifiable unit of gold for investment available on the market today. Adam joined Keith and John for an invigorating discussion on what the future of gold is going to look like.
“We’re at the tip of the iceberg in terms of mainstream gold investment in the United States.”
That was how Adam began his thoughts on the state of gold today. Keith and Adam take a deep dive into all things gold – what makes gold money and the obstacles that stand in its way, the different forms and functions of gold, legal tender laws,

Keith presented his Theory of Interest and Prices at the Mises’ Austrian Economics Research Conference earlier this year. Described as one of the most interesting talks of the entire event, this episode includes his fifteen-minute presentation as well as some follow-up thoughts by Keith himself at the end. In this episode, he covers:

Was Milton Friedman right about inflation?
The dynamics of the central banks pushing interest below time preference, and above the marginal productivity of the entrepreneur.
What does the collapse of the Tacoma Narrows Bridge and Jimi Hendrix’s guitar playing have to do with interest rates, monetary dynamics, and the Federal Reserve?
Plus: Keith’s summary thoughts at the end – the critical differences between positive and negative